Portfolio reviews

I thought it might be interesting to invite fellow stockopedes to tell each other about their real life portfolios. Such disclosures should as a minimum list the companies held. Preferably the relative weightings also. But nothing so vulgar as absolute values, please.

If you have time to explain your reasons for making individual stock selections that would be very much appreciated, but you shouldn't hold back just because you don't have time to include that level of detail. You can always add in detail and texture later.......

The author may hold shares in this company. All opinions are his own. You should check any statements that appear factual and seek independent professional advice before making any investment decision.

I follow a simple rule, avoid most of the small caps. IMO that is the area where you get loads of liars and cheats. Directors that will talk up their share prices to get the price racing away only to dilute shareholders with endless placings.

I do not hold any small caps at all in my portfolio, infact everything I hold at the moment I regard as low risk & cheap.

But this is because I think the markets are in a dangerous period & I expect to see significant volatility over the next two months.

Once October is out of the way and markets have dropped significantly from here I will look to add more risky shares that are actually less risky with lower share prices then current levels.

Right now I am looking & waiting to take a short on the FTSE, my target is between the 5450-5600 range, hopefully we will see these numbers in the coming weeks.

Unfortunately, it is my experience that a significant proportion of natural resource company directors are "economical with the truth". Often this is manifested by undue emphasis being placed on positive aspects of a business and the avoidance of mention of potential serious negatives. In my experience, it is rare to come across directors who tell the unvarnished truth.

I can think of a number of instances where your comments might appear to be "too charitable by half" ;-)

No doubt Darron (and Was) can too.....

In the defence of some managements who might appear to be "in the middle" on a ranking of apparent integrity etc (we all know examples of the extremes) , I might observe that it can be incredibly difficult for some situations to be explained in a way which is both honest and accurate - and not misleading!! One of the main reasons for this is that managements cannot be responsible for what third parties actually do (or fail to do) - whether they be governments, contractors or risk-sharing partners. And third parties are, by their very nature, quite unpredictable - especially on matters of timing, but also on matters of their interest in abiding by legal agreements - as well as suffering from potential conflicts of interest. For example, does the third party prioritise project A when it comes to allocating scarce funds, or project B? It may not make much difference to the third party, but it can be a big issue for partners involved in one project but not the other......

...so, for example, when ANOther minnow (as at least two have in recent years) announce that Exxon is coming into their project, that appears to be highly positive - but if, once in, it doesn't pass the investment hurdles at a later date they may exit again - or, more awkwardly, start to drag their feet but stay in. And (to keep the balance) at the other end of the scale where XYZminnow is a partner but doesn't have the funding in place, they may start to drag their feet and vote against perfectly good projects that will involve cashcalls. None of these third party matters are easy for a management to explain clearly in the sort of detail that shareholders might prefer - or to be more accurate, they aren't easy if one wishes to avoid publically dissing one's partners (competitors) in an RNS.

But you are right to try to form a view of management integrity! If they are at least trying to do the right thing by their shareholders on a continuing basis, then that should make them automatically more investible than those who have a more distant relationship with facts and the truth.

And yes, of course one should also be sceptical of highly prospective acreage being acquired for next to nothing (though nb much of the cost is in work programmes, not in upfronts). There was probably a time when that could be done - but, unless one has a technical genius on the staff who can find prospects where others think there aren't any, such times are a few years ago.

Many, including Ben Graham, advocate setting a minimum market cap. for their investments. However, surely our experience over the last few years is that nothing is safe? Consider Royal Bank Of Scotland (LON:RBS) , Lloyds (LON:LLOY) , most of the REITS and Wolseley (LON:WOS) all of whom were forced to dilute shareholders significantly during the GFC and created a significant and permanent loss of value for those shareholders. These are just some examples that spring to my mind, I'm sure there are others. Then we have £BP since then. Those investing pre- the Deepwater Horizon accident won't have recovered their losses yet.

The counter argument is, of course, that "elephants can't gallop". A couple of 5+ baggers can make up for quite a few total writeoffs!

Personally, at this stage in my investing lifecycle, I'm happy to adopt a more aggressive stance - but still with a decent level of balance to control my risk. As Graham emphasised, however, the more aggressive approach also requires considerably more work, if you want a decent likelihood of success.

Another very important consideration is your likelihood of having an "edge" vs the general market. With well-analysed largecaps, EMH is likely to prevail most of the time. The individual investor is unlikely to be able to out-analyse the herd of institutional investors. OTOH, if you do your homework thoroughly (and understand why an apparent opportunity may have been overlooked by analysts) you may have a chance with a smallcap, as ee has, of spotting something not apparent to the general market. Moreover, smallcap stocks tend to be more volatile, which in and of itself creates more opportunities for mispricings to occur. If you can spot those mispricings on stocks you know well, and have funds available to take advantage of them (when they occur to the downside), they can be great opportunities for profit. It is also important to recognise mispricings to the upside (overexuberance) and use those as opportunties to replenish your coffers. Of course, this is far easier said than done and I've certainly got it wrong on plenty of occasions. Sometimes an "opportunity" turns out to be nothing of the sort, and large players are rushing for the exits for very good reason. Equally, I'm often guilty of "selling too soon".

It is undoubtedly true, however, that when dabbling in smallcaps, you are in shark-infested waters and you need to be appropriately cautious.

In my experience small caps are highly lucrative after a market crash providing one can choose stocks that have a sound business model with good growth outlook and balance sheet are the ones that tend to multi bag.

Those that bought the likes of Fenner(LON:FENR), Cape(LON:CIU) & £ETO back in 2009 have done very well.

£BP on the other hand probably an exception because we have been in a bullish oil price environment and from an early stage the impacts of the spill were not apparent.

Whereas back in 2007 when we had the raid on Northern Rock it was quite clear the banking system was in a total shambles.

I agree you get the odd large cap that destroys value to the magnitude of Royal Bank Of Scotland(LON:RBS) & Lloyds(LON:LLOY) but I think more often then not the odds are firmly in the favour of the investor. One can simply range trade FTSE 350 stocks and make a good living.

Many people on ADVFN do this all the time. Very few people can be a Mark Bentley or a David Carmen.

I'd feel a lot more comfortable holding 10% of my portfolio in the likes of Glaxosmithkline(LON:GSK), Astrazeneca(LON:AZN), Vodafone(LON:VOD), Royal Dutch Shell B(LON:RDSB). £BG. BHP Billiton(LON:BLT), BP. etc then say in Aminex. I think I would have a lot of sleepless nights If I held 10% of my portfolio in Aminex......Whereas the large caps I could Invest and forget about them for several weeks/months if need be.

Another very important consideration is your likelihood of having an "edge" vs the general market. With well-analysed largecaps, EMH is likely to prevail most of the time. The individual investor is unlikely to be able to out-analyse the herd of institutional investors

To some degree I agree with this but there are ALOT of people who range trade the large caps and make a lot of money. The stocks Darron Preseton recommended last week Cookson(LON:CKSN) & so on do you think they are long term Investments for him? I think not. He is range trading those IMO and will offload when they go back to more reasonable levels.

What I am trying to say is you don't need any special kind of insight to do this, all you need is a market that is likely to uptrend atleast for the next few weeks/months buy a cheap large cap and you can simply buy these at the bottom of their range and thus have been beaten down and they are likely to float up with the general markets.

If you read the evening standard's market reports on a daily basis it usually goes along the lines of the FTSE rallied today on the back on Banks and Miners....or the FTSE declined led by Miners/Banks.....Even today they talk about the resource sector leading the markets higher...

OTOH, if you do your homework thoroughly (and understand why an apparent opportunity may have been overlooked by analysts)

I agree but this takes an awful lot of effort, time and hardwork & if you get it right it can be profitable. No way is it as easy as range trading the FTSE 350 though.

Moreover, smallcap stocks tend to be more volatile, which in and of itself creates more opportunities for mispricings to occur. If you can spot those mispricings on stocks you know well, and have funds available to take advantage of them (when they occur to the downside), they can be great opportunities for profit. It is also important to recognise mispricings to the upside (overexuberance) and use those as opportunties to replenish your coffer

Yes, it happened to Encore last week when it dropped to about 38p and it went to around 53p today....

Equally, I'm often guilty of "selling too soon".

To be honest with you I have been following your posts over a long period and think you actually have a very good balance. I like the mechanical aspect of your portfolio whereby when a holding reaches x% it becomes overweight and you tend to top slice.

That is one way to manage risk in a portfolio, another being to take short positions to hedge.

It is undoubtedly true, however, that when dabbling in smallcaps, you are in shark-infested waters and you need to be appropriately cautious.

When you pick up the phone to one of the small cap directors they very very rarely tell you anything negative about their company, they tend to tell you what you want to hear. And when one lacks the technical expertise that is required in the Oil/Mining industry it can be even more challenging to identify the bullshit.

Hence I have reached the conclusion that one of the most important criteria in investing - especially in natural resource companies - is the integirty of the management. My own view is that once you find a management who's pronouncements you have good reason to believe you can trust, it is worth following them very closely.

A management team such as that at Polo Resources(LON:POL) perhaps, Mark?

The Board of Directors of Polo Resources Limited (AIM and TSX: POL) is pleased to announce that it has resolved to increase its proposed 2011 special dividend from 1p to 2p per share (gross), upon the completion of the disposal of its interest in Caledon Resources plc ("Caledon"), previously announced on 23 June 2011.

"We are delighted to announce the doubling of our proposed special dividend payment to 2p per share as part of our commitment to return value to our shareholders. This follows a special dividend of 3p per share in 2010 following the disposal of Polo's interest in Extract Resources Limited. These successful investments demonstrate management's ability to identify growth opportunities and convert these into realised financial gains for shareholders.

"Our ethos is to invest in projects where we can add value, irrespective of geographic location or commodity focus. We are in the enviable position of having enough cash to build on our current portfolio of investments and are actively reviewing attractive new investment opportunities both in mining, oil and gas."

Time for me to consider reinvesting here methinks (ISAble too)! Share price should open north of 5p shortly.

Below is my portfolio (mix of paper (90%) and spreadbets (10%)) as it currently stands and what it was in Feb 2011. I have quite a few (worthless at the moment) share options in one of these companies that I can't disclose here.

My main gripe with teh way I do things is that I still after all these years of investing (since 2004) dont maintain a high cash balance to taek advantage of recent drops and I never ever seem to get into habit of wanting to topslice until it is too late. I keep some cash (not shown below) in a spreadbet account to keep those margin calls at bay.

So if GKP come in then I will be a happy investor indeed. I am fairly comfortable with this exposure and although not as optimistic as other GKP holders, I do expect a >£5 bid to take them out....eventually.

My objective for rest of 2011 through to end of 2012 though is to build up some more blue chips miners and add to blue chip oilies, and to find some new decent tiddlers for punt money. Am no share visionary and I will follow the intelligent hordes as ever.

First post for me on stockopedia so firstly I apologise that my portfolio review is likely to be less insightful, as very much an amatuer compared to posters above. Nonetheless a useful exercise for me and also i would welcome any feedback on some big decisions ahead for me.

Currently investments split between SIPP (2/3) and ISA (1/3), holdings as follows:

To date I have made my investments with a long timeframe in mind and haven't applied to much science to investments i make within the ISA or SIPP (beyond SIPP'ing those that can't ISA'ed). I have also duplicated some holdings in both.

The cash position is somewhat misleading. It represents cash pending investment within the SIPP and ISA, in reality my wife and I have been looking to buy a home (in London) for the past two years + and have held most of our very hard earned savings in depressingly low interest savings accounts (non ISA), nonetheless representing a very good deposit in readiness to pounce on a property. Including these savings our cash position is closer to 66%.

I would be grateful of any comments re some key future capital allocation decisions I'm wrestling with. Following the very disappointing (and stressful) falling through of a property purchase over the summer (vendor had failed to disclose history of minor subsidence resulting in difficulties securing insurance complying with the mortgage we already had secured etc etc), we have recently decided to kick house purchasing into the long grass for a little while we focus on other priorities. In the meantime we are reviewing our cash position and have decided it might be time to act to some degree to readjust the cash weighting. There are still plans to buy a property at some point and my investment track record is not sufficiently established to be reckless, however, we are looking to drip feed c.50% of our deposit into equity (probably) investments. This would represent an almost equivalent amount to that already invested and so a pretty exciting prospect. We are looking to maintain a reasonable amount of diversification, and avoid the more highly speculative, nonetheless I am also looking to be overweight in investments with some linkage to UK house prices (ideally London house prices if possible). Not expecting to achieve an overly sophisticated hedge but I am happy that the notion sounds sensible (e.g. investing in Lloyds may go badly but this might be more than mitigated if caused as a result of a reduction in house prices, when i come to buy).

If anyone has any suggestions on strategy, ideas on investments (including prefs) or comments on tax implications (ISA allocation exhausted) would be very gratefully received.

If anyone has any suggestions on strategy, ideas on investments (including prefs) or comments on tax implications (ISA allocation exhausted) would be very gratefully received.

I don't have much useful to say and I wouldn't presume to give anyone advice. However, Iwould observe that there doesn't seem to be a clear timeframe for how long the "long grass" period is expected to last, given that you say There are still plans to buy a property at some point ....so I wonder how appropriate the strategy is to the cicumstances.

We are looking to maintain a reasonable amount of diversification, and avoid the more highly speculative, nonetheless I am also looking to be overweight in investments with some linkage to UK house prices (ideally London house prices if possible). Not expecting to achieve an overly sophisticated hedge but I am happy that the notion sounds sensible

To be honest I wouldn't personally be comfortable aiming at a link to London property prices (even if intending to buy there at some point) and I would be far from confident that I could identify a suitable number of investments with such a linkage and then calculate even roughly what sort of hedge ratio might be appropriate. I would generally think that most equity investments that might have such a connection to the London property market are a) leveraged with respect to that connection and b) have a good deal of expectation (based on projections of the recent past) already in their prices. If the market stutters, I would struggle to predict the outcome of any hedge portfolio (but would fear it may be much worse than the underlying, even if only a small portion of capital was deployed).

Perhaps others may have more useful comment on the detail - but I'm sceptical of the big picture plan.

FWIW I would'nt Invest your cash that your looking to buy a property with, in the stock market unless you are prepared to tuck the cash away for a minimum of 3 years IMO.

It sounds like you have enough cash to buy a property in London as you was close to doing a deal, so does it really make sense to drip feed half of that cash in the markets?

How would you and your wife feel if you lost that cash? How many months and years would that set you back ?

These days when I invest I tend to focus more on the chances of me losing cash then making it.

Land Registry stated on Friday London house prices are up 1.9% in July alone and it was the only region to show an year on year increase, record number of people are flat sharing and apparently 50% of FTB have given up hope of ever buying a property. London house prices are now back to 2007 levels. According to Halifax house prices are the most affordable they have been in the last 12 years.

As long as there is cheap financing which is likely to be the case atleast for a few more years then it is unlikely that house prices will drop significantly & even if they do it will just be bought up by the record number of individuals who can't afford to buy.

My view is I don't expect house prices to rise significantly from here but at the same time I don't expect them to fall much either.

But the idea of renting & paying someone else mortgage stinks, I'd rather buy my own property and pay my mortgage IMO - As long as you buy a reasonably priced property and don't overpay then I think you should be OK.

'Long grass' is sadly fairly uncertain for us now hence decision to review leaving so much in cash which is not even keeping pace with inflation. My guess would be looking to buy autumn next year at the earliest (however we're conscious that we're both comfortable renting and it might then take us a further year plus to find anywhere). Decision to delay house buying is not to do with any sentiment regarding future direction of house prices it's just that we're hoping to start a family within the next year and for various personal reasons we don't want to be dealing with that and housebuying at the same time (appreciate doing it afterwards is probably no walk in the park either stress wise...).

Note your points re leverage and effective linkage of hedge - i don't think attempting anything overly scientific is viable or necessary for us. Nonetheless perhaps I should ignore any concept of notional hedge, as very keen to avoid it becoming a justification for selecting a stock i otherwise don't consider to be good value.

Outlined plan isn't definitive, just not hugely keen to leave things as they are though.

Don't disagree with your comments re housing market. We're not looking to time the housing market and would be very happy to buy now but for personal reasons we are delaying.

Having 100% loss of half of our deposit would certainly hurt very badly and it would certainly delay us for many years in terms of recovering that amount through savings on the other hand it wouldn't necessarily delay plans to buy (would mean certainly mean combination of i) less comfortable LTV which was currently 25%+ on property we'd hoped to buy this summer; ii) cutting out cloth in terms of what we buy; iii) liquidating other savings e.g. ISA savings not included in deposit saving, if not also wiped out of course.

Apologies for the delay in getting back to you on those Canadian Resource companies you so kindly mentioned. I've had a perusal of their websites, and listened to the podcasts. Quite a lengthy endeavour, but very interesting.

I have to say that several really took my fancy, both given the sectors they're exposed to, and the size of their yields. as to the companies of particular note, they were:

Freehold Royalty. The concept of receiving income royalties from the freehold mineral rights others drill on, coupled to a percentage of production without the costs to secure such production, is exceedingly interesting. And a generous yield, last around 8.7% when you mentioned it. The results on 10th august 2011 looked decent as well despite the noticeable negative comments:

Given their reliance on the performance of other companies their depth of revenue sources across the sector provides some comfort imv.

Definitely one I will be investing in come the next round.

On to 49 North Resources, a venture capital fund of a sort with a diversified portfolio of assets, both direct project involvement and investment in the securities of the resource issuers focusing on Saskatchewan - interested to read that their exposure is to both Oil&Gas, as well as base /precious metals, coal, uranium and rare earths. Nice diversified basket of exposure to commodities we use in ever increasing quantities worldwide.

The lack of dividend was an initial dampener but the likelihood of potential spin off distributions a la WTI (Caf shares for example) more than makes up for this.

So again, one I will definitely take a dabble in...

Zargon oil&Gas:

Conservatively run company, focusing on income generation. High payout which you identify as possibly not being sustainable.Agree there - I think Q2 2011 Funds from Operations came in @ $13.76m, versus a divi payout of $10.47m. Will be interesting to see how Q3 and Q4 come in on that front. But @ C$0.14/month, equating to C$1.69 one to watch.Not going to invest in the next round as my Oil&Gas exposure is currently quite high.

And finally, had a look at Superior plus. Quite an intriguing company, with several business segments consisting of propane distribution, specialty chemicals,and construction products. Not sure about the latter which seems to have struggled, but the Energy Services division(with expansion into US NE on the Refined fuels front looks like a great opportunity.) A stonking yield, 10% around the time you mentioned it and Q2 2011 results in August looked very decent across the board of its businesses. The management seem pretty clued up, conservative, and quick to take measures to strengthen the business where weaknesses arise - such as cutting the dividend to C$0.1c from C$0.135c in Feb2011- now pays C$1.20 per year). 2011E for Adjusted Operating Cashflow is C$1.55-$1.90, so assuming they hit this guidance figure the lower dividend looks fairly secure. Plenty could go wrong, although worsening weather wont be a factor here...

Not too sure about the announced retirement of the CEO in June, always adds a bit of uncertainty to any business but given that management have planned(prepared) for low economic growth, made conservative assumptions, the ship seems to be sailing in the right direction.

You mentioned, at the time, that you were looking into Superior. anything catch your eye? Am sufficiently interested to make this the third company of the ones you mentioned that will be going in to porty at the next round.

Once again,many thanks for bringing these off the radar companies to my attention.

Have to say I was quite surprised at the "proposed Subscription" document I received from Ivy medical this morning. Their last rights issue was at 10p I recall, and they were suspended a good two and a bit years ago around the 8p level - there was much talk about a reverse takeover which never materialised. In addition the replacement chairman passed away.

It seems the "reverse takeover" is essentially now at a massive discount, with the Sunrise investors receiving 17.6 million shares for a paltry £88,000 investment.(ie 0.5p/sh) for a 52.1% stake.

In addition it seems that John Finn is owed £6000 for which he will receive 1.2 million new shares.

At what point does an investment in this company, which is no longer listed , become a write off for CGT purposes. I spoke to J Finn last year and he said because the company was still in operation, despite being worth 95% of its pre suspension value, it still wasn't eligible for being qualified as a loss for capital gains purposes.

Not one of my better investments despite having a parent that benefited from his treatment a decade or so ago.

If the current value of your holding is considerably less than the value of the CGT benefit you could obtain from a crystalling a loss (and there's little prospect of recovery), could you reach agreement with the company (or the Sunrise investors) to dispose of your shares at an agreed price (e.g. 0.5p/share), thus crystallising a loss?

As on of the five largest shareholders, prior to the suspension, I'm a tad surprised I wasn't contacted vis the financing at any point, but kept in the dark to only find out now.

The current value of my holding, at 0.5p/sh, means a significant loss.

It seems contacting the Sunrise investors now post the event is the only route. Personally I'd prefer that the company went into liquidation - 0.5p/sh is frankly , taking the piss for a paltry 88,000 investment

Did you get your Offer for Subscription documents for Ivy Medical Chemical.

Subscription price 10p/sh
Ratio: 1 new share for every 100 held (excess application also available)

Now whilst its great to hear they're still a going concern, I'm surprised that the subby price is 10p/sh - especially given it was only in MAY this year that confetti was being dished out - with one person given one million plus shares for a £6500 debt owed(or less than 0.5p/sh) !!!!! And they want the rest of us to subscribe at 10p/sh now?

May 2013 deets.

Sunrise debt for Equity swap, 17.6m shares for £88,000
John Finn 1.2 million shares for £6000 debt owed to him.

I said at the time it was taking the mickey. That's stretching it.

Yet they want the rest of us to pay 10p/sh......Effectively putting a floor under the value of their millions of shares. ie John Finn's 1.2million shares effectively £120,000 for a £6000 debt.Nice work.

Am I missing something here? Surely they're having a laugh?

I've sipped a few glasses so perhaps missing the obvious other than , if they'd have asked me, I'd have paid Finn the £6k for a measly 500,000 shares at the time